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From Mickelson to mob, Walters knows being under fire

Billy Walters, the prominent high-stakes sports gambler and longtime target of government scrutiny, granted USA TODAY Sports a sit-down interview and addressed allegations made about him throughout the years.

CARLSBAD, Calif. -- Billy Walters wept while talking about his brain-damaged son. He bristled while discussing investigations into his business affairs. And he shook his head in disgust when, after acknowledging he wagered years ago and sparingly on professional golf, he was asked how he'd respond if someone suspected he placed bets based on inside information he got from Phil Mickelson.

Fighting a lingering virus and a cloud of suspicion earlier this week, Walters, the prominent high-stakes sports gambler and longtime target of government scrutiny, granted USA TODAY Sports a sit-down interview. In the past two weeks, the Wall Street Journal reported that Walters, Mickelson and billionaire Carl Icahn are under investigation by federal agents for possible insider trading, although the New York Times, citing four people briefed on the matter, wrote Wednesday that Mickelson's role has been overstated.

While Mickelson is in Pinehurst, N.C., this week to compete in the U.S. Open, Walters sat in a restaurant just outside San Diego and a 30-minute drive from Rancho Santa Fe Golf Club, where he and Mickelson are members and occasionally play golf together.

"So what do you want to know?'' he asked.

This is part of what's known about Walters and Mickelson:

Both are gamblers, Mickelson having wagered thousands of dollars on golf and sports and Walters having wagered millions of dollars on golf, sports and poker.

Both are shareholders in Callaway Golf, with Walters having forged a close friendship with Ely Callaway Jr., the late company founder, and Mickelson having signed a lucrative endorsement deal with the company in 2004.

Both are multimillionaires with private jets and luxury homes and now under federal investigation. At issue is what Walters knew when he purchased stock in Clorox, although Mickelson is not the focus of that investigation, according to the Times. Walters and Mickelson still face questions about trades they made in Dean Foods 2012.

Fielding questions and sidestepping others this week, Walters declined to say whether he and Mickelson gambled on golf or sports together. He also declined to talk on the record about whether he and Mickelson have discussed stocks or other financial dealings. But Walters, 67, was candid about his own issues.

He has donated $10 million to Opportunity Village, a charitable organization in Las Vegas that trains disabled people like his 47-year-old son for jobs. He has given millions of dollars to other causes, and in 1997 Walters and his wife, Susan, were honored as Philanthropists of the Year by a host of Nevada politicians: Sen. Harry Reid, former senators John Ensign and Richard Bryan, former congressman Jim Gibbons and former governor Bob Miller. But it's controversies that have put Walters in the spotlight.

Since the 1980s, he has drawn the scrutiny of authorities in Kentucky and Nevada, the FBI, the SEC and even the AT&T Pebble Beach National Pro-Am. Which is to say nothing about rumors, allegations and hearsay routinely thrown his way.

"I've had an X on my back for a long time, partner," he said.

The allegation: He uses inside information for the purposes of sports gambling

Sean Patrick Griffin, author of "Gaming the Game'' — an acclaimed book about the 2007 betting scandal involving NBA referee Tim Donaghy — said a few Las Vegas gamblers are "adamant'' that one or two football referees in the Southeastern Conference help Walters with his college football picks. Brian Tuohy, author of "Larceny Games: Sports Gambling, Game Fixing and the FBI," said via email, "Walters, from my sources, actually has waaay too close of connections to several big time college coaches for all of his bets to be legit. He's getting inside information from these guys without a doubt.''

Walters scoffed at the allegations.

"I don't have any great inside sources," said Walters, who noted that 2013 was the first time in 39 years he has finished the year having lost more money than he won on sports wagers. "It's the last thing in the world one would want.

"If you're going to look at something you're going to evaluate, you want totally independent, unbiased information from someone that doesn't have a personal vested interest in something. ... A total, complete sucker would be the only person who would think that they could rely on something like that and be successful.

"I don't care what you're investing your money in, if the integrity is questioned and it goes away, the market is going to go away. If people thought they were betting on sporting events and (the events) were dishonest, people would quit betting on them. And if they quit betting on them, you don't have a marketplace. There's no place to participate.

"So the integrity of the game is the most important thing in the world for me from a market perspective and also a handicapping perspective."

The charge: He has sandbagged on the golf course

In 2008, a former official for the United States Golf Association (USGA) implied Walters had cheated when Walters teamed up with Swedish pro Fredrik Jacobson at the AT&T Pebble Beach National Pro-Am. They obliterated the field by 10 strokes, with Walters playing as an 11 handicap but looking more like a scratch golfer on the putting green.

"Notorious sandbagger," is what Dean Knuth, once in charge of monitoring handicaps for the USGA, called Walters in a story published by Golf World. Knuth said Walters should have been playing at a 4 handicap, and the tournament committee investigated.

Before it was over, Knuth had sent Walters a letter of apology and a formal retraction that Walters shared with USA TODAY Sports.

"He's an admitted liar, nothing more, nothing less," Walters said.

Meanwhile, the tournament committee reported it found no evidence of sandbagging. Walters said he has been invited back twice, including this year when he played at a 6 handicap and missed the cut.

"They don't let you win a second time," said Walters, 67, referring to the tournament lowering his handicap. "But if I'd done something wrong, they wouldn't have invited me back."

The allegation: He has mob ties

The New York Daily News, in an article following the Journal report, alleged Walters has "suspected mob ties."

Moreover, Walters said, he left Nevada for about six months because of a feared shakedown from mob enforcer Anthony "The Ant" Spilotro.

"Someone else approached me, supposedly on his behalf, and wanted me to meet with him," Walters said. "And I knew what that meant, and that's when I left town. I left town the next day."

Walters said he returned only after Spilotro was found dead in June 1986.

"The fact of the matter is, I would have never come back if the situation hadn't changed," he said.

The allegation: He has exploited his political influence

Steve Miller, a former Las Vegas city councilman, has accused Walters of exploiting ties to politicians to get sweetheart land deals. Walters countered, saying he was the only person to bid on two of those deals and that he has lost millions of dollars on three golf courses he built on city property.

That said, he readily acknowledges contributing to political campaigns.

"It's very simple,'' he said. "If you're in business, the government leaders are a business person's partner"

The charge: illegal bookmaking

In 1985, Walters was arrested and charged with illegal bookmaking. It turned out he was part of a sophisticated sports gambling syndicate known as the Computer Group — taking bets, not placing bets.

But Walters, who was acquitted on those charges, acknowledged he had worked as an illegal bookie in Kentucky before moving to Las Vegas in 1982.

"And I took responsibility for that," Walters said. "I plead guilty to a gambling misdemeanor and paid a small fine. And the misdemeanor was expunged and taken off my record two years later. …

"Just so you'll know, I've never been convicted of anything in my life from a felony standpoint. That's what the facts are.''

The charge: money laundering

In 1996, Walters said, he'd applied with the Nevada Gaming Control Board for a license to operate sports book facilities. A.G. Burnett, chairman of the gaming control board, said he was not with the board at the time Walters said he was under review so he cannot provide details. Walters said he takes pride in having received verbal approval, but before it was official, he heard from other state authorities — indicting him on charges of money laundering.

Rogue cops, according to Walters, said they would squash the investigation if he gave them $500,000. He refused, and an agonizing six-year battle ensued.

He was indicted three times on the money laundering charges. Each time, he was acquitted.

"I'm the most careful, conservative person you know in regard to the way I conduct my business affairs," he said. "I'm extremely careful to make sure I do everything in a legal, lawful manner."